News Africa12 Aug 2019

Africa:Climate risk cover of up to US$49.5m helps drought-hit communities

| 12 Aug 2019

Humanitarian agencies are setting up innovative climate risk insurance policies to protect up to 1.3m people in West Africa from catastrophic drought. The countries benefitting include Senegal, Mali, Mauritania, Burkina Faso and the Gambia.

These policies will unleash funds to assist vulnerable communities threatened by drought before it reaches catastrophic levels. Collectively, the purchased policies could release a total of $49.5m across the five countries.

In a statement, the World Food Programme (WFP) says that it and Start Network have purchased these climate risk insurance policies from the African Union’s Africa Risk Capacity (ARC), complementing those purchased by national governments.

This initiative, which is known under the name “ARC Replica” allows governments and humanitarian agencies to quickly access and channel financing to vulnerable people in the event of an extreme drought.

“ARC Replica is strengthening the insurance coverage offered by ARC by increasing the sum insured for Mali,” explained WFP Country Director, Silvia Caruso. “This increases the number of people that will benefit from a payout in the case of a major drought.”

This financing helps to protect livestock and other assets, and to supplement feeding programmes for undernourished children. Start Network and WFP have worked with each insured country to identify how resources and assistance can most efficiently be delivered.

ARC and ARC Replica use pre-agreed triggers such as rainfall satellite data which allow for rapid response involving pre-agreed activities such as cash transfers and the distribution of food and nutrition supplements. The aim is to avoid situations where families take children out of school, migrate or sell livestock and seeds before the next agricultural season.

Pay-outs are made as early as two weeks after a failed harvest – months earlier than traditional humanitarian resources are made available. Typically, aid agencies are reliant on funding that gets provided by donors after a crisis has already taken place. By the time a crisis has been determined and humanitarian appeals have been formulated, many lives and livelihoods can be lost.

ARC

The African Risk Capacity (ARC) is an institution set up by the African Union to strengthen African countries’ management of climate risk. This is achieved by offering governments drought insurance policies in exchange for an annual premium. ARC Replica is an insurance product offered by ARC to humanitarian organisations as an innovative approach to expand climate risk insurance coverage to more people and improve the effectiveness of emergency humanitarian response in vulnerable African countries prone to climate risks.

Start Network is the Replica partner in Senegal and it will sign a policy later this year in Madagascar.


 

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